Trade Ideas Blog
1 Stock’s Collapse Reveals a Pattern Others Might Follow
Apr 7, 2008
As many of our subscribers confirm – our technology works – really well. Here’s an example that features option filters recently added and Bear Stearns. I think this example is more relevant as we prepare to absorb one of the last of the giants in the financial sector that’s been exposed to the sub-prime mortgage disaster: Citibank (its earnings are scheduled for release on April 18th).
- Wednesday, March 12 – ALSO NOTED: Rumors about Bear Stearns liquidity heat up
- Friday, March 14 – What’s up with Bear Stearns?
- Monday, March 17 – Update: Bear Stearns finally falls
- Tuesday, March 18 – JP Morgan bets big on Bear Stearns
Specifically: Can a higher than usual spike in put-option volume lead to a significant drop-off in price? How large must the unusual volume be? How long is the optimal time to hold a possible short position?